UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Diep Quoc Bao SERVICE QUALITY, PERCEIVED PRICE AND CUSTOMER SATISFACTION IN HIGHER EDUCATION A comparison between Public Universities and Non-public Universities in Vietnam MASTER OF BUSINESS (Honours) UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Diep Quoc Bao SERVICE QUALITY, PERCEIVED PRICE AND CUSTOMER SATISFACTION IN HIGHER EDUCATION A comparison between Public Universities and Non-public Universities in Vietnam ID: 60340102 MASTER OF BUSINESS (Honours) SUPERVISOR: PROF. NGUYEN DONG PHONG -1- ABSTRACT This study empirically examines the effects of Perceived Tuition on University Service Quality and Student Satisfaction as well as the impact of University Service Quality on Student Satisfaction toward higher education service. The research also explores the moderating role of University Type variable on these relationships. Structural equation modeling was used to test these impacts, utilizing a sample of 612 students in two Public universities and two Non-public universities.
The results indicate that both University Service Quality and Perceived Tuition play significant role in predicting Student Satisfaction. In addition, Perceived Tuition not only has a direct impact on Student Satisfaction, but also an indirect influence through University Service Quality. The findings of this research also provide evidence of the differences between Public sector and Non-public sector in the influence of Perceived Tuition on University Service Quality, Student Satisfaction, and University Service Quality on Student Satisfaction. Particularly, the effect of Perceived Tuition and University Service Quality on Student Satisfaction is much greater in Non-public universities compared to that in Public universities.
Hence, an increase in University service quality or Perceived tuition leads to a higher increase in Student satisfaction extent in Non-public universities compared to Public sector. It implies that university managers have to pay attention to improve their service quality and consider the approach in pricing the service in other to satisfy their students. The students are persuaded by the fitness between service quality they receive and the tuition they have to pay for university compared to other similar tertiary institutions. The research findings also engage with some limitations in the strength of measurement scale, the sampling method as well as the fitness between the research model and data.
It results in the valuable directions for further researches in future. -3 ACKNOWLEDGEMENTS I would like to express my sincere appreciation of the advice, guidance and support that I have received from my academic supervisors, my colleagues, and staff at ISB. In particular, I wish to extend special thank you for the support and guidance from Professor Nguyen Dong Phong and Assoc. Nguyen Dinh Tho.
They have patiently instructed and shared with me their experiences to help me forward on right decisions. I wish to express my gratitude to the University of Economics Ho Chi Minh city who have supported me during two years for the Masters degree. Finally, I would like to thank many of my colleagues and friends from the academic and business environment who have offered valuable advice and assistance for me to accomplish my study. -4 STATEMENT OF AUTHENTICATION (Candidate Certificate) I certify that the work in the thesis entitled “Service quality, Perceived price and Customer satisfaction in higher education – A comparison between Public universities and Non- public universities in Vietnam” is the result of my own research and has not been submitted for a higher degree to any university or institution other than International School of Business (ISB).
I also certify that the thesis has been written by me. Any help and assistance that I have received in my thesis have been appropriately acknowledged. Signed Date: December, 2012 -5 TABLE OF CONTENTS Title.iii Statement of authentication.iv Table of contents.vii List of Tables. viii List of Figures.
Higher education in Vietnam. Research problem statement. Scope of the research. Significance of the research.
Organization of the thesis.9 Chapter 2 – LITERATURE REVIEW AND HYPOTHESES. Service quality concept and measurement. Service quality in higher education. Perceived service price in higher education.
Customer satisfaction in higher education. Service quality and customer satisfaction in higher education. Perceived price and customer satisfaction in higher education. Perceived price and service quality in higher education.
Moderating effect of University type (Public and Non-public universities). Research model & hypotheses. 24 -6 Chapter 3 – RESEARCH METHODS. Qualitative research design.
Quantitative research design. 34 Chapter 4 – DATA ANALYSIS AND REASEARCH RESULTS. Data statistical analysis. Cronbach’s Alpha coefficient of reliability test.
Exploratory Factor Analysis (EFA) result. Confirmatory Factor Analysis (CFA) result. CFA for University Service Quality scale. CFA for Perceived Tuition scale and Student Satisfaction scale.
Discriminant validity test. Composite reliability and variance extracted. Research model test. Theoretical model test by using SEM approach.
Theoretical model estimation by BOOTSTRAP. Results of Multi-group analysis. 49 Chapter 5 - DISCUSSION, IMPLICATIONS AND LIMITATIONS. Discussion and implications of the research.
Limitations and directions for further research.1 - Script for focus group interview.2 - The qualitative research findings.1 - The result of EFA analysis.2 - The result of CFA for University service quality (Sequa) scale.3 - The result of CFA for Sequa scale (Nacadm5 excluded).8 - The result for multi-group analysis of variance model and partial invariance model (University type variable).87 - LIST OF TABLES Table 3.1 : Measurement scales Table 4.1 : Descriptive statistics of the data Table 4.2 : Cronbach’s Alpha coefficients for each measurement scale Table 4.3 : EFA analysis result Table 4.4 : Cronbach’ Alpha results after excluding unsatisfactory items Table 4.5 : The results for reliability and variance extracted test Table 4.6 : The relations among concepts in research model (standardized) Table 4.7 : The results for Bootstrap estimation Table 4.10 : The difference between fitness indices of variance model and partial Invariance model in term of university type (unstandardized) Table 4.11 : Relations among concepts in variant model in term of university type (unstandardized estimates) Table 4.12 : The impacts of Perceived tuition on Student satisfaction description (unstandardized estimates) LIST OF FIGURES Figure 2.1 : The model of customer satisfaction Figure 2.2 : Research model Figure 3.1 : Research procedure Figure 4.1 : CFA result for University Service Quality scale (Standardized) Figure 4.2 : SEM analysis result for saturated model (Standardized estimates) Figure 4.3 : The result for theoretical model test (standardized) Figure 4.4 : The SEM results of variance and partial invariance model (According to University type) -2 Chapter 1 INTRODUCTION 1. Higher education in Vietnam According to the Vietnamese Education Law in 2012, higher education covers undergraduate and postgraduate studies. Undergraduate studies can lead to diploma or bachelor degrees while postgraduate studies can lead to master degrees and doctorate degrees. In Vietnam higher education system, higher education institutions are structured including: Colleges can offer college programs and other lower level programs; Universities can offer college, undergraduate, master and doctorate programs as assigned by the Prime Minister; Research institutes can offer doctorate programs and in cooperating with universities can offer master programs subject to permission from the Prime Minister.
In the tertiary education institutes system, Vietnam has two forms: public universities and colleges which are funded by the Government and non-public institutes which including semi-State, self-funded or private universities and colleges, regarding to Decision 9/2001/QD-BGD&DT of the Ministry of Education and Training dated 28 August, year 2001. There is a fundamental difference in managerial perspective of the Government between these two sectors. The public sector has to follow strictly the regulations of the Government in tuition policies and financial aspects, according to Decree 49/2010/ND-CP of the Government dated 14 May, year 2010, while the non- public sector has more self-control. Over the past 10 years, higher education in Vietnam has experienced many changes, consisting of expansion as well as establishment of new educational institutions with diversified types and improvement in quality (Nguyen, Oliver, Priddy, 2009).
-3 According to the statistics of Ministry of Education and Training, Vietnam have 386 universities and colleges in 2011 with 306 public institutes and 80 non-public universities and colleges. This number is increasing to 409 institutes at the beginning period of the year 2012 (Vietnam education system, 2012). Nevertheless, the opportunities for higher education in Vietnam are limited and the quality control is also an existing problem of the system (Nuffic Nesco Vietnam, 2009). The continuous increase in the number of not only public but also non-public universities and colleges in Vietnam from 322 institutions in 2006 to 409 institutions in 2012, according to the statistics of Ministry of Education and Training from 1999 to 2012, is facing with many challenges in quality assurance.
The reality shows that faculty qualifications are generally low and vary significantly across forms of tertiary education institutions (Nuffic Nesco Vietnam, 2009). The report No.760 of Ministry of Education and Training (2009) conceded that it is too difficult for the Ministry of Education and Training to control all the higher education institutions in whole country. Especially, in non-public sector, the managerial role of Ministry of Education and Training is very limited and not create effectiveness yet (Mai Lan, 2011). Although non-public tertiary education is one of the most significantly developing st sector of the higher education system in 21 century (Philip, 2002), the non-public higher education in Vietnam is in the crisis (Mai Lan, 2011).
In an interview, the Vice Minister of Ministry of Education and Training - Bui Van Ga stated that non-public tertiary educators need to focus on improving the quality to create the prestige in society and attract more students (Vietnamese education, 2011). Quality in higher education is one of the aspects attracting more and more attentions of society and learners. There is a lack of uniform development in quality between public and non- public sectors in Vietnamese higher education system. -4 In line with quality problems, other outstanding issue in higher education between public sector and non-public sector is the tuition - tuition is an amount of money which learners or learner„s families have to pay in order to ensure the expenditures for the educational operations – due to the non-public education institutions have more self- right to decide the level of tuition, regarding to Decree 49/2010/ND-CP of the Government dated 14 May, year 2010, tuition is taken into the dominant consideration of learners (Huy Lan, 2012).
The Vice Minister of Ministry of Education and Training - Bui Van Ga required the non-public education organizations have to provide explicitly about their tuition rate to help the learners have right decision in registration and avoid later dissatisfaction. The students expect high service quality corresponding to tuition of the universities (Do Hop, 2012). The relationship between service quality in higher education and the price – tuition – which the students have to pay for service received needs to be considered adequately. In the Fundamental and Comprehensive Renovation of Higher Education during 2006−2020 addressed in Resolution 14/2005/NQ-CP of the Government dated 2 November, year 2005, the objective emphasized in building and developing quality assurance system for higher education.
However, Vietnamese educators and educational leaders are still confused about how to implement quality assurance and accreditation in the Vietnamese context (Nguyen, Oliver, Priddy, 2009). Associate with the growth of higher education in quality and quantity, students have more choices for their studying and using services. As the students pay for complete expenditure for their learning at tertiary institutes, they deserve the best education services to satisfy their requirements (Senthilkumar & Arulraj, 2010). Therefore, the education institutions are striving to attract customers by offering their best services and reasonable tuition rate.
Given this situation, a study of relationships of service -5 quality, price and customer satisfaction in higher education in Vietnam, especially, in the specific context of public sector and non-public sector, would be useful for practitioners and researchers. Research problem statement The important role of service industries is increasing in line with the development of the economy in many countries (Pham & Le, 2010). Service sector attracts more and more attentions of real business world and research fields.